Re: [TSP_Strategy] retired

 

Don't really understand the logic of this. Say you want $50,000 in cash and to roll over $100,000 to an IRA.

If you do those 2 separate steps on Form TSP-77, you get $40K and the TSP sends in your $10K (20%)  to the IRS.

If you do just one step to roll over $150,000 to an IRA and then take your $50K as income. Your IRA holder is still obligated to hold the 20% taxes - and you've also paid much higher fees while the money is in the IRA.  No matter where pretax money is, when you withdraw it, you may taxes.

The only reason I can see option all to IRA to be superior is that you don't know for sure how much you want to take or take it at varying time.

Even if you buy index funds in an IRA, the lowest fees I have seen are .05-.07% (double or more that of TSP .029%). I've seen funds with fees of .95% and much higher.

Am I missing something?  

Ralph, thanks for adding info about taking full withdrawal (which also can go to IRA so it isn't taxed immediately).

Looking forward to when TSP offers more withdrawal options.

On Thursday, August 27, 2015, Ralph Architzel rarch71@gmail.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com> wrote:

 

Why don't you take the one-time partial to an IRA directly so that it doesn't get taxed.  Once it is in that IRA you can take out the portion you want immediately and only that part will be regular income - the remainder will be more flexible in an IRA than that which you leave in the TSP, but I think the TSP is hard to beat.

You can always take a full withdrawal later on (after a partial) - and that can be a combination full withdrawal.

On Thu, Aug 27, 2015 at 11:34 AM, Gayle Taylor dollhousefreak@yahoo.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com> wrote:

 

I believe I know the answer but just in case ---- 

I retired a little over 2 years ago.  So far have not touched my TSP.  I am thinking about taking the one time withdrawal to bank some and to spend some! (Hey, could be hit by a truck tomorrow, right?)

So they will tax the heck out of it unless I open an IRA, correct?

Thanks

Gayle

 

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-- Cindy King

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Posted by: Cindy King <cindy.kingde@gmail.com>

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